TEIKOKU DATABANK

Survey on corporate attitudes towards employment trends for fiscal 2010

Corporations with “no plan” to hire permanent employees account for 50% for 2nd straight year

-- 50.8% expect employment situation to recover in 2011 at earliest --

Introduction

With the Japanese economy suffering from employment and income concerns caused by the global recession, the employment situation remains tough as the ratio of job offers to job seekers in December 2009 was 0.46, falling below 1 for the 24th straight month, and only 73.1% of graduating students have informally received a job offer as of December 2009. Meanwhile, there are significant gaps between regions, between industries, and between permanent and non-permanent employees in terms of employment trends. Teikoku Databank conducted a survey to study about corporate attitudes towards employment trends for fiscal 2010.
Research Period: February 17 to 28, 2010
Research Subject: 21,750 corporations across Japan
Valid Responses: 10,624 corporations (response rate 48.8%)
*This is the sixth survey on wage trends, following surveys conducted in February 2005, February 2006, February 2007, March 2008 and February 2009.

Results of the Research

14.3% to hire more permanent employees than last year, nearly 50% to plan no permanent staff hiring in fiscal 2010
Asked about plans for permanent employee hiring (including new graduates and mid-career workers) in fiscal 2010 (from April 2010 to March 2011), 1,519 corporations said they will or plan to hire more permanent employees than last fiscal year, accounting for 14.3% of the 10,624 corporations, or only a little more than one-tenth of the total. The percentage, however, increased 3.1 points from the 11.2% in the outlook for fiscal 2009, which was surveyed in February 2009.

Nearly 60% plan no non-permanent staff hiring
Asked about plans for hiring non-permanent employees (including temporary workers, part-timers, etc.) for fiscal 2010, 657 out of the 10,624 corporations, or 6.2% of the total, said they will or plan to hire more non-permanent employees than last fiscal year. Meanwhile, as many as 6,056 corporations, or 57.0% of the total, said they have no plan to hire, accounting for nearly 60% of the total for the second straight year. Thus, the employment situation remains tough for non-permanent job seekers.

11.7% see “increase” in permanent employee ratio
Asked about forecasts for the ratio of permanent employees in fiscal 2010, 1,358 out of the 10,624 corporations, or 12.8% of the total, said they will or plan to lower it from the fiscal 2009 levels, and slightly more than 11.7%, or 1,244 corporations will or plan to raise it.

Permanent employee ratio to rise because 42.0% want to “respond to expanding ops”, accounting for largest share, while 21.5% will “cut non-permanent jobs due to sluggish business”, fewer than fiscal 2009
Asked what factors made them decide or plan to raise the ratio of permanent employees in fiscal 2010 (multiple answers allowed), 522 out of the 1,244 corporations that said they will or plan to do so said they want to respond to their expanding operations, accounting for the largest share at 42.0% of the total and increasing significantly by 10.4 points from the 31.6% in the forecasts for fiscal 2009.

22.1% “already adjusted” hiring, 12.2% to “consider” it in fiscal 2010
Asked whether they have carried out employment adjustments due to the recession after the Lehman Brothers bankruptcy (multiple answers allowed), 2,349 out of the 10,624 corporations, or 22.1% of the total, said they had already adjusted hiring. In addition, 1,567 corporations, or 14.7% of the total, said they were implementing employment adjustment. Thus, more than 30% of corporations have carried out employment adjustment before.

Most and second most employed ways to adjust hiring were cutting or stopping “mid-career hiring” and “new graduate hiring”
1,793 out of the 4,883 corporations, or 36.7%, that said they had already implemented, were implementing, or would consider implementing hiring adjustment, said they have chosen or would choose to hire fewer or no mid-career employees to carry out employment adjustment (multiple answers allowed), accounting for the largest share of all.

18.6% already received, 14.2% to consider receiving Employment Adjustment Subsidy
The government has relaxed requirements for corporations in receiving Employment Adjustment Subsidy in its fiscal 2010 budgets. Asked whether they received or plan to receive the subsidy, 1,430 out of the 10,624 corporations, or 13.5% of the total, said they were receiving the subsidy.

50.8% expect hiring situation to improve in fiscal 2011 at earliest
The employment situation of a corporation needs to have improved in order for the corporation to become active in hiring workers. 2,420 out of the 10,624 corporations, or 22.8% of the total, said they expect that the employment situation in the region and industry they belong to would improve in fiscal 2011, accounting for the largest share of all. With those corporations included, more than half at 50.8% of the total, or 5,402 corporations, said it would improve in fiscal 2011 or later.

Survey on corporate attitudes towards employment trends for fiscal 2010